Apple has the following at Jan 1, 2018
2,000,000 shares of common stock issued and $1 par outstanding 4,000,000 shares authorized
Additional paid in capital $5,750,000
retained earnings $12,345,000
During 2018 the following occured
Net income: $6,789,000
cash dividend declared May 15: $.70 per share
cash dividends paid on Jun 30th
stock dividends declared on November 30th : 17%
stock dividend distributed on 12/31
the market price of the stock has been $36 all year
Prepare journal entries to record cash and stock dividends
prepare a owners equity section of Apple's balance sheet of 12/31/2018
In: Accounting
Use the information below to answer the next 3 questions:
At the beginning of the year, JJB Inc. estimated that overhead would be $880,000 and direct labor hours would be 220,000 hours. At the end of the year actual overhead was $920,600 and there were actual direct labor hours of 230,000. Year ended unadjusted COGS is $2,000,000.
What is the Rredetermined Overhead Rate?
|
$2.63 |
||
|
$4 |
||
|
$4.18 |
||
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None of the above |
QUESTION 8
What is the overhead variance?
|
$200 overapplied |
||
|
$400 underapplied |
||
|
$600 overapplied |
||
|
$600 underapplied |
QUESTION 9
The adjusted Cost of Goods Sold is:
|
$2,000,000 |
||
|
$2,000,400 |
||
|
$2,000,600 |
||
|
$1,999,400 |
In: Accounting
In: Accounting
Please use the values from the question submitted.
Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records:
All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 30 percent are collected in the following month. Uncollectibles amounting to 10 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.
Sixty percent of the merchandise purchases are paid for in the month of purchase; the remaining 40 percent are paid for in the month after acquisition.
The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $90,000; accounts receivable, $210,000; and accounts payable, $75,000.
Mary and Kay, Inc. maintains a $90,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 10 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time.
Additional data:
| January | February | March | |||||||
| Sales revenue | $ | 540,000 | $ | 630,000 | $ | 645,000 | |||
| Merchandise purchases | 360,000 | 390,000 | 510,000 | ||||||
| Cash operating costs | 102,000 | 81,000 | 144,000 | ||||||
| Proceeds from sale of equipment | — | — | 24,000 | ||||||
Required:
Prepare a schedule that discloses the firm’s total cash collections for January through March.
Prepare a schedule that discloses the firm’s total cash disbursements for January through March.
Prepare a schedule that summarizes the firm’s financing cash flows for January through March.
In: Accounting
true or false: The weighted-average approach to process costing combines the work and costs done in prior periods with the work and costs done in the current period.
In: Accounting
January 1, 2018, Apple is authorized to issue 200,000 shares $1.00 par common stock and 5,000 shares $200 par 5% cumulative and non-participating preferred stock. The transactions took place in 2018
Jan 14: issue 5,000 shares of common stock at $17 per share
Feb 2: issue 4,000 shares of preferred stock in exchange for building with a fair market value of $800,000
July 6: Re-purchased 2,000 shares of common stock at $18 per share (cost method)
Aug 15: sold 2,000 of the treasury shares at $19 per share
Dec 31: declared preferred dividends and a common stock dividends of $2.00 per share
Dec 31: close the income summary account ($150,000 of net income)
Prepare Journal entries for each transaction and prepare the statement of changes in OE for the 2018 year end.
In: Accounting
Analysis and Interpretation of Profitability
Balance sheets and income statements for 3M Company follow.
| Consolidated Statements of Income | |||
|---|---|---|---|
| Years ended December 31 ($ millions) | 2008 | 2007 | 2006 |
| Net sales | $25,269 | $24,462 | $22,923 |
| Operating expenses | |||
| Cost of sales | 13,379 | 12,735 | 11,713 |
| Selling, general and administrative expenses | 5,245 | 5,015 | 5,066 |
| Research, development and related expenses | 1,404 | 1,368 | 1,522 |
| Loss/(gain) from sale of business | 23 | (849) | (1,074) |
| Total operating expenses | 20,051 | 18,269 | 17,227 |
| Operating income | 5,218 | 6,193 | 5,969 |
| Interest expenses and income | |||
| Interest expense | 215 | 210 | 122 |
| Interest income | (105) | (132) | (51) |
| Total interest expense | 110 | 78 | 71 |
| Income before income taxes | 5,108 | 6,115 | 5,625 |
| Provision for income taxes | 1,588 | 1,964 | 1,723 |
| Net income including noncontrolling interest | 3,520 | 4,151 | 3,902 |
| Less: Net income attributable to noncontrolling interest | 60 | 55 | 51 |
| Net income | $ 3,460 | $ 4,096 | $ 3,851 |
| Consolidated Balance Sheets | ||
|---|---|---|
| ($ millions) | 2008 | 2007 |
| Assets | ||
| Current Assets | ||
| Cash and cash equivalents | $ 1,849 | $ 1,896 |
| Marketable securities-current | 373 | 579 |
| Accounts receivable-net | 3,195 | 3,362 |
| Inventories | ||
| Finished goods | 1,505 | 1,349 |
| Work in process | 851 | 880 |
| Raw materials and supplies | 657 | 623 |
| Total inventories | 3,013 | 2,852 |
| Other current assets | 1,168 | 1,149 |
| Total current assets | 9,598 | 9,838 |
| Marketable securities-noncurrent | 352 | 480 |
| Investments | 111 | 298 |
| Property, plant and equipment | 18,812 | 18,390 |
| Less: Accumulated depreciation | (11,926) | (11,808) |
| Property, plant and equipment-net | 6,886 | 6,582 |
| Goodwill | 5,753 | 4,589 |
| Intangible assets-net | 1,398 | 801 |
| Prepaid pension benefits | 36 | 1,378 |
| Other assets | 1,659 | 728 |
| Total assets | $ 25,793 | $ 24,694 |
| Liabilities | ||
| Current liabilities | ||
| Short-term borrowings and current portion of long-term debt | $ 1,552 | $ 901 |
| Accounts payable | 1,301 | 1,505 |
| Accrued payroll | 644 | 580 |
| Accrued income taxes | 350 | 543 |
| Other current liabilities | 1,992 | 1,833 |
| Total current liabilities | 5,839 | 5,362 |
| Long-term debt | 5,166 | 4,019 |
| Pension and postretirement benefits | 2,847 | -- |
| Other liabilities | 1,637 | 3,566 |
| Total liabilities | 15,489 | 12,947 |
| Equity | ||
| 3M Company shareholders' equity | 9 | 9 |
| Additional paid-in capital | 3,006 | 2,785 |
| Retained earnings | 22,227 | 20,316 |
| Treasury stock | (11,676) | (10,520) |
| Accumulated other comprehensive income (loss) | (3,686) | (843) |
| Total 3M Company shareholders' equity | 9,880 | 11,747 |
| Noncontrolling interest | 424 | -- |
| Total equity | 10,304 | 11,747 |
| Total liabilities and equity | $ 25,793 | $ 24,694 |
(a) Compute net operating profit after tax (NOPAT) for 2008. Assume
that the combined federal and statutory rate is: 35.9% (Round your
answer to the nearest whole number.)
(b) Compute net operating assets (NOA) for 2008 and 2007. Treat noncurrent Investments as a nonoperating item.
(c) Compute 3M's RNOA, net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2008. (Round your answers to two decimal places. Do not round until your final answer. Do not use NOPM x NOAT to calculate RNOA.)
(d) Compute net nonoperating obligations (NNO) for 2008 and 2007.
(e) Compute return on equity (ROE) for 2008. (Round your answers to two decimal places. Do not round until your final answer.)
(f) What is the nonoperating return component of ROE for 2008? (Round your answers to two decimal places.)
In: Accounting
Prepaid pension benefits is not considered an operating asset. Pension and post retirement benefits is considered an operating liability. Please clarify why Prepaid pension benefits is not part of the operating assets, and why Pension and post retirement benefits is part of operating liabilities.
In: Accounting
Budgeted Income Statement and Supporting Budgets
The budget director of Gold Medal Athletic Co., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for March:
Estimated sales for March:
| Batting helmet | 1,200 units at $40 per unit |
| Football helmet | 6,500 units at $160 per unit |
Estimated inventories at March 1:
| Direct materials: | |
| Plastic | 90 lbs. |
| Foam lining | 80 lbs. |
| Finished products: | |
| Batting helmet | 40 units at $25 per unit |
| Football helmet | 240 units at $77 per unit |
Desired inventories at March 31:
| Direct materials: | |
| Plastic | 50 lbs. |
| Foam lining | 65 lbs. |
| Finished products: | |
| Batting helmet | 50 units at $25 per unit |
| Football helmet | 220 units at $78 per unit |
Direct materials used in production:
| In manufacture of batting helmet: | |
| Plastic | 1.2 lbs. per unit of product |
| Foam lining | 0.5 lb. per unit of product |
| In manufacture of football helmet: | |
| Plastic | 3.5 lbs. per unit of product |
| Foam lining | 1.5 lbs. per unit of product |
Anticipated cost of purchases and beginning and ending inventory of direct materials:
| Plastic | $6 per lb. |
| Foam lining | $4 per lb. |
Direct labor requirements:
| Batting helmet: | |
| Molding Department | 0.2 hr. at $20 per hr. |
| Assembly Department | 0.5 hr. at $14 per hr. |
| Football helmet: | |
| Molding Department | 0.5 hr. at $20 per hr. |
| Assembly Department | 1.8 hrs. at $14 per hr. |
Estimated factory overhead costs for March:
| Indirect factory wages | $86,000 |
| Depreciation of plant and equipment | 12,000 |
| Power and light | 4,000 |
| Insurance and property tax | 2,300 |
Estimated operating expenses for March:
| Sales salaries expense | $184,300 |
| Advertising expense | 87,200 |
| Office salaries expense | 32,400 |
| Depreciation expense—office equipment | 3,800 |
| Telephone expense—selling | 5,800 |
| Telephone expense—administrative | 1,200 |
| Travel expense—selling | 9,000 |
| Office supplies expense | 1,100 |
| Miscellaneous administrative expense | 1,000 |
Estimated other income and expense for March:
| Interest revenue | $940 |
| Interest expense | 872 |
Estimated tax rate: 30%
Required:
1. Prepare a sales budget for March. Enter all amounts as positive numbers.
| Gold Medal Athletic Co. Sales Budget For the Month Ending March 31 |
|||||||
|---|---|---|---|---|---|---|---|
| Unit Sales Volume |
Unit Selling Price |
Total Sales | |||||
| Batting helmet | $ | $ | |||||
| Football helmet | |||||||
| Total revenue from sales | $ | ||||||
2. Prepare a production budget for March. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Gold Medal Athletic Co. Production Budget For the Month Ending March 31 |
||
|---|---|---|
| Units | ||
| Batting helmet | Football helmet | |
3. Prepare a direct materials purchases budget for March. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Gold Medal Athletic Co. Direct Materials Purchases Budget For the Month Ending March 31 |
||||||
|---|---|---|---|---|---|---|
| Plastic | Foam Lining | Total | ||||
| Units required for production: | ||||||
| Batting helmet | ||||||
| Football helmet | ||||||
| Desired units of inventory, March 31 | ||||||
| Total units available | ||||||
| Estimated units of inventory, March 1 | ||||||
| Total units to be purchased | ||||||
| Unit price | $ | $ | ||||
| Total direct materials to be purchased | $ | $ | $ | |||
4. Prepare a direct labor cost budget for March. Enter all amounts as positive numbers.
| Gold Medal Athletic Co. Direct Labor Cost Budget For the Month Ending March 31 |
||||||
|---|---|---|---|---|---|---|
| Molding Department |
Assembly Department |
Total | ||||
| Hours required for production: | ||||||
| Batting helmet | ||||||
| Football helmet | ||||||
| Total | ||||||
| Hourly rate | $ | $ | ||||
| Total direct labor cost | $ | $ | $ | |||
5. Prepare a factory overhead cost budget for March.
| Gold Medal Athletic Co. Factory Overhead Cost Budget For the Month Ending March 31 |
|
|---|---|
| $ | |
| Total | $ |
6. Prepare a cost of goods sold budget for March. Work in process at the beginning of March is estimated to be $15,300, and work in process at the end of March is desired to be $14,800. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Gold Medal Athletic Co. Cost of Goods Sold Budget For the Month Ending March 31 |
|||
|---|---|---|---|
| $ | |||
| $ | |||
| Direct materials: | |||
| $ | |||
| Cost of direct materials available for use | $ | ||
| Cost of direct materials placed in production | $ | ||
| Total manufacturing costs | |||
| Total work in process during period | $ | ||
| Cost of goods manufactured | |||
| Cost of finished goods available for sale | $ | ||
| Cost of goods sold | $ | ||
7. Prepare a selling and administrative expenses budget for March.
| Gold Medal Athletic Co. Selling and Administrative Expenses Budget For the Month Ending March 31 |
|||
|---|---|---|---|
| Selling expenses: | |||
| $ | |||
| Total selling expenses | $ | ||
| Administrative expenses: | |||
| $ | |||
| Total administrative expenses | |||
| Total operating expenses | $ | ||
8. Prepare a budgeted income statement for March.
| Gold Medal Athletic Co. Budgeted Income Statement For the Month Ending March 31 |
|||
|---|---|---|---|
| $ | |||
| $ | |||
| Operating expenses: | |||
| $ | |||
| Total operating expenses | |||
| Income from operations | $ | ||
| Other revenue and expense: | |||
| $ | |||
| Income before income tax | $ | ||
| Net income | $ | ||
In: Accounting
A department uses the FIFO method of process costing. All direct materials are added at the beginning of the process. This department has the following data for this month.
What is the department's total cost of units completed and transferred out (round final answer to nearest cent if necessary)?
In: Accounting
Pope’s Garage had the following accounts and amounts in its financial statements on December 31, 2013. Assume that all balance sheet items reflect account balances at December 31, 2013, and that all income statement items reflect activities that occurred during the year then ended.
| Accounts receivable | $ | 31,600 |
| Depreciation expense | 11,900 | |
| Land | 25,900 | |
| Cost of goods sold | 86,500 | |
| Retained earnings | 63,700 | |
| Cash | 10,000 | |
| Equipment | 70,500 | |
| Supplies | 5,700 | |
| Accounts payable | 22,600 | |
| Service revenue | 29,400 | |
| Interest expense | 3,200 | |
| Common stock | 6,000 | |
| Income tax expense | 22,425 | |
| Accumulated depreciation | 41,000 | |
| Long-term debt | 37,000 | |
| Supplies expense | 13,100 | |
| Merchandise inventory | 26,600 | |
| Sales revenue | 175,000 |
| a. | Calculate the total current assets at December 31, 2013. |
| b. | Calculate the total liabilities and stockholders’ equity at December 31, 2013. |
| c. | Calculate the earnings from operations (operating income) for the year ended December 31, 2013. |
| d. | Calculate the net income (or loss) for the year ended December 31, 2013. |
| e. | What was the average income tax rate for Pope’s Garage for 2013? |
| f. |
If $18,500 of dividends had been declared and paid during the year, what was the January 1, 2013, balance of retained earnings? |
In: Accounting
A new business client comes to your office. There are three owners of the business. The three individuals, Alan, Bob, and Carol, are thinking about forming a partnership. Alan is only investing $1 million in cash. He will not have anything to do with the daily activities of the business. Bob has had some experience in the business and will be responsible for the day-to-day operations of the business. Carol has a great deal of experience and many contacts within the business. She will be responsible for attracting new clients. Neither Bob nor Carol are investing cash into the partnership. During the first year of operation, the partnership generated a profit of $150,000. None of the partners received distributions during the year.
Payment of Salary
A. Should the two partners who are working in the business receive a salary? Why or why not? Be sure to support your decision with research and quantitative data.
B. If the two non-investors did receive a salary, how would their capital account be affected? How would this impact a potential future liquidation or buyout? Be sure to thoroughly explain and support your answer.
C. Should the cash investor receive a higher share of the profits or other sharing options? Why or why not? Support your opinions with research and quantitative data.
D. If the cash investor did receive a salary, how would his capital account be affected? How would this impact a potential future liquidation or buyout? Be sure to thoroughly explain and support your answer.
E. How do the payment of salary and the allocation of profit affect entries and the financial bottom line? Be sure to support your explanation with concrete examples.
F. How could the payment of salary and allocation of profit be a more effective method of splitting the company's profits for the three partners? Explain a scenario in which the three partners would be all compensated fairly, and support your answer with logical reasoning.
G. What would be the value of each partner's capital account at the end of the year, given your proposed fair allocation method? Support your answer with quantitative data and an explanation of how you came to this conclusion.
In: Accounting
Controllership in Accounting
Employment Rules vs Personal & Privacy Concerns
Characters: Sandy, the controller of ABC, Inc., a small manufacturing company
Jacob, the controller of Micro, Inc., a small manufacturing company
Sandy is a controller of ABC, Inc., a small regional manufacturing company. During her
four years of employment at ABC, she has worked her way up through the ranks. She has
been the controller for the past year and has consistently received favorable evaluations.
Sandy enjoys her work and is good at what she does.
ABC, Inc., is close to finalizing a merger with Micro, Inc., a similar manufacturing company.
The merger will be finalized in two weeks, on July 1. When the companies merge, various
positions will be eliminated to avoid duplication of efforts in the merged company. A variety
of positions will be cut, including manufacturing workers, office staff, and management
positions. The decisions on personnel cuts will be announced August 1.
Jacob, the controller of Micro, Inc., has been with that company for less than a year. He is
perceived favorably by management. The newly merged company will need only one
controller, and Sandy has received unofficial confirmation that she will be the controller of
the new firm and that Jacob will be dismissed.
Sandy has had significant responsibility for her parents during the past two years. Her
father has terminal cancer, and the specialist has given him only six months to live. Her
mother is emotionally distressed and needs special attention from time to time. In addition,
after years of trying, Sandy has recently found out that she is pregnant. She plans to take a
short maternity leave and then return to work full-time.
Sandy realizes the time demands of her current and experted family and also the time
demands of working as the controller of the newly merged company. She feels that she will
be able to balance her personal and professional life in such a way that her job performance
will not suffer. Yet, she wonders if she should make her boss aware of her responsibility to
her parents and her pregnancy.
Answer the following questions from the case above :-
1. What are the relevant facts of the case?
2. What, if any, are the ethical issues?
3. Who are the stakeholders?
4. What are the possible alternatives including any ethical concerns?
5. What are the practical constraints?
6. What action(s) should be taken?
In: Accounting
How shall an entity subsequently measure financial liabilities? Is IFRS measurement of financial liabilities similar to that of U.S. GAAP? Also briefly describe the requirements regarding an option to designate a financial liability at fair value through profit and loss. Does U.S. GAAP allow fair value option for financial assets and liabilities? What is “own credit” issue related to financial liabilities measured at fair value through profit and loss? How does IFRS 9 address this “own credit” issue?
In: Accounting
Who should be included in the Audit Committees?
In: Accounting